According to Pratt Energy Information Singapore, industry sources said that due to new demand in the spot market, confidence in the Asian gasoline market has increased and market fundamentals have been supported, driving gasoline prices to a nearly two-month high in August/September.
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In the derivatives market, Singapore’s August/September 92 RON gasoline spread widened to 95 cents/barrel on Wednesday, rising an average of 12 cents/barrel per day. According to S&P Global Platts, it has risen 31 cents per barrel since early July.
In terms of direct prices, Singapore’s 92 RON gasoline August swap price surpassed the $70/barrel threshold, at $70.77/barrel, the highest level since May 30, 2019 (then $71.50/barrel).
Next, the spreads remained positive in the fourth quarter and the first quarter. On Wednesday, Asian markets closed at 53 cents a barrel, up 12 cents a barrel since early July.
According to Pratts data, Singapore’s gasoline swap price in August was 62 cents per barrel per day, or $5.65 per barrel, higher than Brent’s crude oil swap price, which measures the relative value of the product to crude oil.
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The increase in spreads could even continue into Thursday’s trading day, with market participants saying that the August swap price of 92 RON gasoline could be kept above $6.50 a barrel, significantly higher than the $5.40 a barrel level at Asian closing on Wednesday.
Sources pointed out that in line with the rise, spot market spreads have also steadily risen since early July, as real-time demand in parts of Asia has supported oversupply markets.
On Wednesday, at 8:30 GMT, Singapore’s FOB Singapore 92 RON gasoline settled at $7.13 a barrel against the ICE Brent crude oil futures in recent months, just one cent lower than the three-month high of $7.14 a barrel set on July 5.
Demand came from the Philippines and Vietnam, where buyers sought immediate oil supplies on the spot market after news of domestic refinery problems.
Earlier Pratz reported that the Bataan refinery, which produces 180,000 barrels a day, would extend its production cycle to late August, while the Naghi-Son refinery, which produces 200,000 barrels a day in Vietnam, would reduce its crude distillation unit to about 50%.
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In addition, sources added that the strong rise in RBOB futures on the New York Mercantile Exchange and the subsequent closure of PES Pennsylvania refineries in the United States also boosted oil prices in the Asian market. Since the beginning of July, the average price difference between RBOB and Brent crude oil in the United States has been $16.09 per barrel, significantly higher than that in June of $11.76 per barrel.